EXHIBIT 10.7


                                CREDIT AGREEMENT

                                 AMENDMENT NO. 1

                                  By and Among


                        NATIONAL HOME HEALTH CARE CORP.,
                            HEALTH ACQUISITION CORP.,
                          NEW ENGLAND HOME CARE, INC.,
                        ACCREDITED HEALTH SERVICES, INC.,
                        CONNECTICUT STAFFING WORKS CORP.,
                           IMPRESSIVE STAFFING CORP.,
                      NEW JERSEY STAFFING WORKS CORP., and
                MEDICAL RESOURCES HOME HEALTH CORP., as Borrower
                                       and

                             HSBC BANK USA, as Bank



                          Dated: As of October 24, 2003



                     $7,500,000.00 Revolving Credit Facility


<PAGE>

                        CREDIT AGREEMENT AMENDMENT NO. 1

      THIS  AMENDMENT No. 1  ("Amendment  No. 1") to the Credit  Agreement  (the
"Credit  Agreement")  dated as of October  24, 2001 by and among  NATIONAL  HOME
HEALTH CARE  CORP.,  a Delaware  corporation,  ("National")  HEALTH  ACQUISITION
CORP.,  a New York  corporation,  NEW ENGLAND  HOME CARE,  INC.,  a  Connecticut
corporation,  ACCREDITED  HEALTH  SERVICES,  INC.,  a  New  Jersey  corporation,
CONNECTICUT STAFFING WORKS CORP., a Connecticut corporation ("Original Operating
Subsidiaries")  is  dated  as of  October  24,  2003  and is made  by and  among
National, the Original Operating Subsidiaries,  IMPRESSIVE STAFFING CORP., a New
York corporation,  NEW JERSEY STAFFING WORKS CORP., a New Jersey corporation AND
MEDICAL RESOURCES HOME HEALTH CORP., a Massachusetts corporation ("New Operating
Subsidiaries")  (National,  Original  Operating  Subsidiaries  and New Operating
Subsidiaries are hereinafter  collectively  referred to as "Borrowers") and HSBC
BANK USA, a New York banking corporation (the "Bank").

                              W I T N E S S E T H :

      WHEREAS,  the Borrower and the Bank entered into the Credit  Agreement for
purposes of establishing in the Borrower's  favor a Revolving Credit Facility in
the maximum aggregate principal amount of $7,500,000.00; and

      WHEREAS,  the  Borrower and the Bank wish to modify  certain  terms in the
Agreement;

      NOW,  THEREFORE,  in  consideration of Ten and 00/100 ($10.00) Dollars and
other good and valuable  consideration,  each to the other in hand paid, receipt
thereof being hereby acknowledged,  and in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:

                     SECTION I: AMENDMENTS TO THE AGREEMENT

                                    ARTICLE 1
                                   DEFINITIONS

      Section  1.01.  Defined  Terms:  Article  1,  Section  1.01 of the  Credit
Agreement is hereby amended so that the following terms are modified and amended
and in some cases added to have the meanings specified below:

      "Amendment Date" shall mean October 24, 2003.

      "Expiration  Date" as to Revolving  LIBOR Rate Loans and  Revolving  Prime
Rate Loans shall mean  Twenty-Four  (24) months  from the  Amendment  Date which
shall be the date on which the Commitment expires.

                                       2
<PAGE>

      "Revolving LIBOR Rate Note" shall mean the amended and restated promissory
note in the form thereof  attached  hereto as Exhibit A1, made and  delivered by
the Borrowers pursuant to Section 2.02(b).

      "Revolving Prime Rate Note" shall mean the amended and restated promissory
note in the form thereof attached hereto as Exhibit A, made and delivered by the
Borrowers pursuant to Section 2.02(b).

      "Security  Agreement"  shall  mean the  Security  Agreement  executed  and
delivered by National and the Original Operating Subsidiaries in connection with
the original closing,  dated October 24, 2001,  attached to the Credit Agreement
as Exhibit B together with the Security  Agreement in the form thereof  attached
hereto as Exhibit B1,  executed and delivered by the New Operating  Subsidiaries
in favor of the Bank with respect to the Collateral pursuant to Section 4.01(f).

                                    ARTICLE 6
                               NEGATIVE COVENANTS

      Article 6 of the Credit  Agreement is hereby amended so that the following
sections are modified by deleting the entire text thereof and replacing, in lieu
thereof, the following text:

      Section 6.01   Financial Condition Covenants:

      (a)  Maintenance  of  Stockholder  Equity.  Have a Net Loss of One Million
Dollars  ($1,000,000.00)  in any one fiscal quarter or a Net Loss of One Million
Dollars  ($1,000,000.00),  in the aggregate in any series of consecutive  fiscal
quarters,  except  that the after tax effect of any  payment  arising out of the
Sunstar Litigation shall not count toward the One Million Dollar ($1,000,000.00)
quarterly  loss  limitation.   Notwithstanding  any  of  the  foregoing,   total
consolidated stockholders' equity of National and its Subsidiaries, after giving
effect to operating results and all capital  transactions,  such as dividends or
stock buybacks, shall not be less than:

        From 06/06/01             Through 07/30/01          $25,000,000
        From 07/31/01             Through 07/30/02          $28,000,000
        From 07/31/02             Through 07/30/03          $31,000,000
        From 07/31/03             Through 07/30/04          $34,000,000
        From 07/31/04             Through 07/30/05          $37,000,000
        From 07/31/05              and thereafter           $40,000,000

                                    ARTICLE 8
                                  MISCELLANEOUS

                                       3
<PAGE>

      Article 8 of the Credit  Agreement is hereby  amended to add the following
Sections:

      Section 8.18   Full Force and Effect.

      (a)  Except  as  specifically  amended  above,  all  other  terms  of  the
Agreement,  all exhibits  thereto,  and the "Loan Documents" as defined therein,
shall remain the same and in full force and effect.  After the effective date of
this Amendment No. 1, the term  "Agreement"  shall mean the Agreement as amended
by this  Amendment  No.  1.  All  capitalized  words  and  phrases  used in this
Amendment No. 1 not otherwise defined herein shall have the meaning set forth in
the Agreement.

      (b) This  Amendment  No. 1 shall  continue in full force and effect  until
full payment of all amounts owed with respect to the Agreement, and the Notes as
defined in said Agreement,  including but not limited to any and all outstanding
fees due thereunder, are paid to the Bank in full.

      Section 8.19. Collateral. All of the collateral described in the "Security
Agreement" (as defined in the Agreement) shall remain in all respects subject to
the lien, charge and encumbrance of said Security Agreement,  and nothing herein
contained  and nothing  done  pursuant  hereto  shall  affect or be construed to
affect the lien,  charges  or  encumbrance  of said  Security  Agreement  or the
priority thereof over all liens,  charges or  encumbrances,  except as expressly
provided herein.

             SECTION II: MISCELLANEOUS PROVISIONS TO AMENDMENT NO. 1

      Section 1.1. Default.  Any default by the Borrower in any of the covenants
herein  made shall,  at the option of the Bank or its  successors  and  assigns,
constitute a default under said Agreement and the Loan  Documents  entitling the
Bank or its successors or assigns to any or all of the other remedies it or they
may have thereunder.

      Section 1.2. Binding.  This Amendment No. 1 shall be binding upon Borrower
and shall be binding and inure to the benefit of the Bank,  its  successors  and
assigns, including any subsequent holder of said Security Agreement.

      Section 1.3. Counterparts.  This Amendment No. 1 may be executed in one or
more  counterparts,  each of which shall be deemed an original  but all of which
together will constitute one and the same instrument.


               [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       4
<PAGE>

      IN WITNESS  WHEREOF,  the  undersigned  have caused this Credit  Agreement
Amendment  No. 1 to be  executed,  sealed and  delivered  the day and year first
above written.

                                            NATIONAL HOME HEALTH CARE CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            HEALTH ACQUISITION CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            NEW ENGLAND HOME CARE, INC.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            ACCREDITED HEALTH SERVICES, INC.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            CONNECTICUT STAFFING WORKS CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            IMPRESSIVE STAFFING CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President

                                            NEW JERSEY STAFFING WORKS CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President


                                       5
<PAGE>


                                            MEDICAL RESOURCES HOME HEALTH CORP.

                                            By: /s/ Robert P. Heller
                                                --------------------------------
                                                Name:  Robert P. Heller
                                                Title: Vice President


                                            HSBC BANK USA

                                            By: /s/ William L. Meli
                                                --------------------------------
                                                Name:  William L. Meli
                                                Title: Vice President



                                       6
<PAGE>

                                ACKNOWLEDGEMENTS


STATE OF NEW YORK          )
                           ) ss.:
COUNTY OF WESTCHESTER      )


      On the ____ day of October,  2003,  before me, the  undersigned,  a Notary
Public in and for said State,  personally  appeared ROBERT P. HELLER  personally
known to me or  proved  to me on the basis of  satisfactory  evidence  to be the
individual whose name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his  capacity,  and that by his  signature on
the  instrument,  the  individual,  or the  person  upon  behalf  of  which  the
individual acted, executed the instrument.


                                                  ------------------------------
                                                  Notary Public


STATE OF NEW YORK          )
                           ) ss.:
COUNTY OF WESTCHESTER      )


      On the ____ day of October,  2003,  before me, the  undersigned,  a Notary
Public in and for said State,  personally  appeared  WILLIAM L. MELI  personally
known to me or  proved  to me on the basis of  satisfactory  evidence  to be the
individual whose name is subscribed to the within instrument and he acknowledged
to me that he executed the same in his  capacity,  and that by his  signature on
the  instrument,  the  individual,  or the  person  upon  behalf  of  which  the
individual acted, executed the instrument.


                                                  ------------------------------
                                                  Notary Public


                                       7